Fitch Upgrades 1 Class of BACM 2005-4

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings upgrades one class and affirms 14 classes of Banc of America Commercial Mortgage, Inc. (BACM) commercial mortgage pass-through certificates series 2005-4. A full list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade is the result of additional paydown and increased credit enhancement since Fitch's last rating action. Fitch modeled losses of 9.3% of the remaining pool; expected losses on the original pool balance total 7.9%, including $104 million (6.6% of the original pool balance) in realized losses to date. Fitch has designated 12 loans (23.5%) as Fitch Loans of Concern, which includes two specially serviced assets (1.9%).

As of the June 2015 distribution date, the pool's aggregate principal balance has been reduced by 85.8% to $225.6 million from $1.59 billion at issuance. Per the servicer reporting, one loan (1.1% of the pool) is defeased. Interest shortfalls are currently affecting classes D through P.

The largest contributor to expected losses is the 25 Lindsley Drive loan (3.5% of the pool), which is secured by a 75,641 square foot (sf) office property built in 1972, renovated in 2013, and located in Morristown, NJ. The property consists of one, three-story building and 14 units. The largest tenant, C3i, Inc. 15,462-sf (21%), expires in 12/2022. There is 7% upcoming rollover in 2016. The decline in performance is a result of low occupancy. The property was 59.2% occupied as of December 2014. Per the master servicer, the property is comparable to the market in terms of rental rates, but has an above-average vacancy rate. The loan matured July 1, 2015 and per the master servicer, the borrower requested a couple of days to hold the extension. An update on financing efforts has been requested.

The next largest contributor to expected losses is the Big Lots Center loan (1.1%), which is secured by a 25,500-sf single retail center built in 1971, renovated in 2000 and is located in San Clemente, CA. The loan is crossed-collateralized and cross-defaulted with two other Big Lots loans in the pool. The property became 100% vacant when Big Lots vacated their space at lease expiration in January 2015. The loan matures Aug. 1, 2015. Per the master servicer, the borrower has indicated they are working to secure financing to pay off at maturity.

The third largest contributor to expected losses is the specially-serviced AAAA Self Storage Facility loan (1.2%), which is secured by a self-storage facility consisting of 457 units located in Norfolk, VA. The loan is 90+ days delinquent. Per the special servicer, the borrower lacks the funds needed to make repairs to several units, and there is a lot of new supply in the market which makes it difficult to remain competitive, even if they offer concessions. The special servicer is moving towards foreclosure.

RATING SENSITIVITIES

Rating Outlooks on classes A-1A through C remain Stable due to increasing credit enhancement and continued paydown.

Fitch upgrades the following class and revises Rating Outlook as indicated:

--$97.1 million class A-J to 'Asf' from 'BBBsf'; Outlook to Stable from Positive.

Fitch affirms the following classes and revises REs as indicated:

--$11.9 million class A-1A at 'AAAsf'; Outlook Stable;

--$31.7 million class B at 'BBsf'; Outlook Stable;

--$15.9 million class C at 'Bsf'; Outlook Stable;

--$29.7 million class D at 'CCCsf'; RE 100%;

--$17.8 million class E at 'CCsf'; RE 100%;

--$19.8 million class F at 'Dsf'; RE 0%;

--$1.7 million class G at 'Dsf'; RE 0%;

--$0 class H at 'Dsf'; RE 0%;

--$0 class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%.

The class A-5A, A1, A2, A3, A4, A-SB and A-5B certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class XP and XC certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988105

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988105

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150717005515/en/

Fitch Ratings
Primary Analyst
Lisa Cook
Director
+1-212-908-0665
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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